Extracting Wealth
The possibility that interest rates may rise even higher does not seem to be deterring many home owners from drawing more equity out of their homes. Freddie Mac reports that home owners refinancing their mortgage this year will draw $257 billion of wealth out of their homes. That’s more than $13 billion more than last year.
Numbers are however expected to trend lower in the coming years. In 2007, Freddie Mac is estimating that homeowners will only extract $152 billion from their homes and $108 billion in 2008. Cheaper and easier financing options are said to be contributing to the number of homeowners choosing to “cash out”.